Workforce
DOD's Hegseth Instructs Defense Agencies to Remove PLAs From Contracts
Agencies will revise existing labor terms in both new and existing contracts
The southwest division of DOD's NAVFAC agency expects to award task orders totaling up to $3 billion to selected contractors for various projects, mostly in California.
Photo courtesy NAVFAC Southwest
Speaking at a press conference in Stuttgart, Germany, U.S. Secretary of Defense Pete Hegseth on Feb. 11 instructed Dept. of Defense agencies to remove language requiring project-labor agreements in all contracts of more than $35 million and to update and revise all existing contracts accordingly.
Undersecretary of Defense John Tenaglia, who is in charge of federal contract operations, followed up the announcement with a memorandum instructing agencies that "effective immediately, contracting officers shall not use project labor agreements for large-scale construction projects" and that "contracting officers shall amend solicitations to remove project labor agreement requirements, including any solicitation provisions and contract clauses."
PLAs are agreements between labor and contractors that generally exempt non-union workers from being able to participate in such projects. The Biden administration's mandate had required them on most federal projects, but a January federal claims court ruling overturned the Biden-era rule in two DOD agencies, the US Army Corps of Engineers and U.S. Naval Facilities Engineering Systems Command, and in the US General Services Administration, but it remains in effect for other federal agencies. The Command, based in San Diego, had already notified staff to remove the requirements from all solicitations on Feb. 11.
The Associated General Contractors of America came up with the legal strategy to challenge the rule via bid protests. The Trump administration has promised to remove the same mandate on 12 projects that were the subject of the AGC bid protest approach.
"The announcement that the U.S. Dept. of Defense will drop project labor agreement mandates from its military construction solicitations is a clear sign that our approach is working," said Jeffrey Shoaf, AGC's CEO in a statement. The group represents roughly one-third union and two-thirds open-shop member companies. "We expect all federal agencies involved in procuring construction services to follow suit and drop what is clearly an unlawful mandate from their construction solicitations."
Shoaf also said AGC would continue to talk with the Trump administration about the need to revoke the mandate executive order and Federal Acquisition Rules to eliminate any remaining ambiguity. The Associated Builders and Contractors, with mostly non-union members, said it would continue to push for similar clarity in the federal construction marketplace.
"ABC has fought hard to restore merit-based fair and open competition in federal contracting so all Americans and all qualified construction firms can compete on a level playing field to build and rebuild America," said Ben Brubeck, ABC vice president of regulatory, labor and state affairs, in a statement. “While we are pleased with the DOD’s policy change," ABC said it still advocate to remove the mandate "government-wide."
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Representatives of North America's Building Trades Unions—the umbrella group that represents several building trade unions—did not immediately respond to requests for comment on the Defense Dept. memo.
In what some observers say appears somewhat uncharacteristic, Trump had made no policy decisions or mentions related to the agreements in either his campaign since the election. He had sufficient support from union members to win enough votes in states such as Wisconsin, Michigan and Ohio to win the election, Also his choice for Labor Secretary, a former Oregon House representative Lori Chavez-Deremer, is seen as a departure for a Republican president, being generally pro-labor and having represented a strong union district in Congress.
Chavez-Deremer has not yet been confirmed for the position by the U.S. Senate.
